Smt. Subbalakshmi Kurada, Bengaluru V. Assistant Commissioner Of Income Tax, Circle- 3(1)(2), Bangalore

ITA 2493/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2029 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. SRINIVASAN
• Keywords: TDS
• Section: 54; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT A NO. 2493 /BANG/2019 ASSESSMENT YEAR: 2016 - 17 SMT. SUBBALAKSHMI KURADA #14, SIRI MANOR, AR GOPALASWAMY LAYOUT, JP NAGAR, 2 ND PHASE, BENGALURU - 560078 PAN: APBPK 4083R VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 3(1)(2) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI V.SRINIVASAN, ADVOCATE RESPONDENT BY : SHR I RAJENDR A CHANDEKAR, J CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 17 .0 2 .2020 DATE OF PRONOUNCEMENT : 08 .0 5 .2020 O R D E R PER B R BASKARAN, ACCOUNTANT MEMBER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 25.11.2019 PASSED BY LD CIT(APPEALS)-3, BENGALURU A ND IT RELATES TO THE ASSESSMENT YEAR 2016-17. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN RESTRICTING THE DEDUCTION CLAIMED U/S 54 OF THE ACT TO 50% OF THE CLAIM MADE ON THE REASONING THAT THE NEW RESIDE NTIAL HOUSE HAS BEEN PURCHASED IN THE NAME OF ASSESSEE AND HIS SON. ITA NO.2493/BANG/2019 PAGE 2 OF 6 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD A RESIDENTIAL HOUS E PROPERTY FOR A SUM OF RS.12.75 CRORES ON 06-11-2015. SHE PURCHASED ANOTH ER RESIDENTIAL HOUSE PROPERTY ON 17-02-2016 FOR RS.11.02 CRORES. THE NE W HOUSE PROPERTY WAS PURCHASED IN THE JOINT NAME OF THE ASSESSEE AND HER SON SHRI KURADA SAGAR CHAKRAVARTHY. THE ASSESSEE CLAIMED DEDUCTIO N OF RS.8.47 CRORES U/S 54 OF THE ACT TOWARDS THE COST OF NEW RESIDENTI AL HOUSE PROPERTY AGAINST THE LONG TERM CAPITAL GAIN ARISING ON SALE OF ORIGI NAL HOUSE PROPERTY. SINCE THE NEW RESIDENTIAL HOUSE PROPERTY HAS BEEN PURCHAS ED IN THE NAME OF ASSESSEE AND HER SON, THE AO RESTRICTED THE DEDUCTI ON U/S 54 OF THE ACT TO 50%, I.E., HE ALLOWED DEDUCTION TO THE EXTENT OF RS .4.23 CRORES ONLY. THE LD CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASS ESSEE HAS FILED THIS APPEAL. 3. WE NOTICE THAT AN IDENTICAL ISSUE HAS BEEN CONSI DERED BY THE CO- ORDINATE BENCH IN THE CASE OF SHRI BHATKAL RAMARAO PRAKASH VS. ITO (ITA NO.2692/BANG/2018 DATED 04.01.2019). IN THE ABOVE SAID CASE, THE ASSESSEE THEREIN HAD PURCHASED NEW RESIDENTIAL HOUS E IN HIS NAME, HIS WIFE AND SON. THE AO RESTRICTED THE CLAIM MADE U/S 54F OF THE ACT TO 1/3 RD OF THE COST OF NEW HOUSE PROPERTY. THE CO-ORDINATE BENCH FOLLOWED THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT I N THE CASE OF DIT(INTL.) VS. MRS. JENNIFER BHIDA (2011)(15 TAXMANN.COM 82)(K AR.) AND HELD THAT THE ASSESSEE IS ENTITLED TO FULL DEDUCTION U/S 54F OF T HE ACT. THE RELEVANT OBSERVATIONS MADE BY THE CO-ORDINATE BENCH IN THE C ASE OF SHRI BHATKAL RAMARAO PRAKASH (SUPRA) ARE EXTRACTED BELOW:- 22. THE NEXT ISSUE IS AS TO WHETHER THE DEDUCTION U/S.54F OF THE ACT HAS TO BE RESTRICTED TO ONLY 1/3RD OF THE C OST OF ACQUISITION OF THE NEW ASSET FOR THE REASON THAT THE ASSESSEE P URCHASED THE PROPERTY ALONG WITH THE NAME OF HIS WIFE AND SON SH OWN AS PURCHASER IN THE DOCUMENT UNDER WHICH THE PROPERTY WAS PURCHASED. ITA NO.2493/BANG/2019 PAGE 3 OF 6 23. THE STAND OF THE REVENUE IS THAT TO CLAIM DEDUC TION U/S.54F OF THE ACT, THE PURCHASE OF THE NEW ASSET S HOULD BE ONLY IN THE NAME OF THE TRANSFEROR I.E., THE ASSESSEE. T O THE EXTENT THE CAPITAL GAIN IS INVESTED IN THE JOINT NAME OF THE A SSESSEES WIFE AND SON, THE DEDUCTION CANNOT BE ALLOWED. ON SUCH R EASONING THE REVENUE AUTHORITIES TOOK THE VIEW THAT EVEN ASSUMIN G THE DEDUCTION U/S.54F OF THE ACT HAS TO BE ALLOWED TO T HE ASSESSEE, SUCH DEDUCTION SHOULD BE RESTRICTED TO 1/3RD OF THE COST OF THE NEW ASSET. THE STAND OF THE ASSESSEE ON THE OTHER HAND IS THAT SEC.54F MANDATES THAT THE NEW ASSET SHOULD BE PURCHASED BY THE ASSESSEE AND IT DOES NOT STIPULATE THAT THE HOUSE SHOULD BE PURCHASED IN THE NAME OF THE ASSESSEE ONLY. 24. THE VIEW OF THE REVENUE FINDS SUPPORT IN THE DE CISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PRAKAS H VS. ITO 312 ITR 40 (BOM) WHEREIN IT WAS HELD THAT TO CLAIM DEDUCTION U/S.54F OF THE ACT, IT IS NECESSARY AND OBLIGATORY TO HAVE INVESTMENT MADE IN RESIDENTIAL HOUSE IN THE NAME OF THE ASSESSEE ONLY AND NOT IN THE NAME OF ANY OTHER PERSON. THE V IEW OF THE ASSESSEE FINDS SUPPORT IN THE DECISION OF HONBLE K ARNATAKA HIGH COURT IN THE CASE OF DIT (INTL.) VS. MRS. JENNIFER BHIDE (2011) 15 TAXMANN.COM 82 (KARN.) WHEREIN IT WAS HELD THAT THE RE IS NO REQUIREMENT THAT INVESTMENT U/S.54EC SHOULD BE IN T HE NAME OF ASSESSEE ONLY. IN THAT CASE NEW ASSET WAS PURCHASED IN THE NAME OF THE ASSESSEE AND HER HUSBAND. THE AO ALLOWED DED UCTION U/S.54EC ONLY TO THE EXTENT OF 50% ON THE REASONING THAT DEDUCTION WILL BE ALLOWED ONLY TO THE EXTENT OF INV ESTMENT MADE IN THE NAME OF THE ASSESSEE. THE HONBLE KARNATAKA HIGH COURT HELD THAT THE ENTIRE CONSIDERATION HAD FLOW FROM AS SESSEE AND NO CONSIDERATION HAD FLOWN FROM HER HUSBAND. MERELY BE CAUSE THE HUSBANDS NAME IS ALSO MENTIONED IN THE PURCHASE DO CUMENT, THE ASSESSEE COULD NOT BE DENIED THE BENEFIT OF DEDUCTI ON. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF CIT VS. KAMAL WA HAL (2013) 30 TAXMANN 34 (DELHI), LAXMI NARAYAN VS. CIT (2018) 89 TAXMANN 334 (RAJ.) & CIT VS. GURNAM SINGH (2008) 17 0 TAXMAN 160 (P & H). 25. THE LAW IS WELL SETTLED THAT WHERE TWO VIEWS AR E POSSIBLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE SH OULD BE FOLLOWED. MOREOVER, THE DECISION OF THE HONBLE KAR NATAKA HIGH COURT IN THE CASE OF MRS. JENNIFER BHIDE (SUPRA) IS IN FAVOUR OF ITA NO.2493/BANG/2019 PAGE 4 OF 6 THE ASSESSEE. FOLLOWING THE SAID DECISIONS, WE HOLD THAT THE ASSESSEE SHOULD BE ENTITLED TO THE BENEFIT OF DEDUC TION U/S.54F OF THE ACT, TO THE WHOLE EXTENT OF INVESTMENT IN PURCH ASE OF NEW ASSET, EVEN THOUGH THE PROPERTY HAS BEEN PURCHASED IN THE JOINT NAMES OF ASSESSEE, HIS WIFE AND SON. WE HOLD ACCORD INGLY. 4. BEFORE US, THE LD A.R FURNISHED A STATEMENT SHOW ING THE MANNER OF PAYMENT OF CONSIDERATION FOR PURCHASE OF NEW RESIDE NTIAL HOUSE. HE SUBMITTED THAT THE ENTIRE SALE CONSIDERATION ON SAL E OF ORIGINAL HOUSE WAS RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE ON 28- 09-2015, 01-10-2015 AND 06.11.2015. THE ASSESSEE INITIALLY MADE FIXED DEPOSITS OUT OF THOSE PROCEEDS TO THE TUNE OF RS.11.50 CRORES. SUBSEQUEN TLY, THOSE FIXED DEPOSITS WERE ENCASHED ON 08-02-2016 AND THE MATURI TY PROCEEDS WERE CREDITED IN THE VERY SAME BANK ACCOUNT. THE ASSESS EE HAS MADE ENTIRE PAYMENT FOR PURCHASE OF NEW HOUSE PROPERTY FROM HER BANK ACCOUNT ON THE FOLLOWING DATES:- 08-02-2016 REINVESTMENT IN NEW PROPERTY 20,00,00 0 08-02-2016 20,00,000 08-02-2016 20,00,000 15-02-2016 STAMP DUTY, TRANSFER DUTY AND FEE 66, 15,200 16.02.2016 REINVESTMENT IN NEW PROPERTY 1, 98,29,500 16.02.2016 3,32,80,000 16.02.2016 3,32,80,000 16.02.2016 TDS U/S 194IA 1,76,40,000 ------------------- 11,66,44,700 ============== THE ASSESSEE HAS ALSO FURNISHED COPY OF BANK STATEM ENT AND THE LD A.R SUBMITTED THAT THE ABOVE SAID PAYMENTS ARE DULY REF LECTED IN THE BANK ACCOUNT OF THE ASSESSEE. ACCORDINGLY, THE LD A.R S UBMITTED THAT THE ENTIRE PURCHASE CONSIDERATION HAS FLOWN FROM THE ASSESSEE ONLY. ACCORDINGLY HE ITA NO.2493/BANG/2019 PAGE 5 OF 6 SUBMITTED THAT THE DECISION RENDERED BY HONBLE KAR NATAKA HIGH COURT IN THE CASE OF MRS. JENNIFER BHIDE (SUPRA), WHICH WAS FOLLOWED IN THE CASE OF SHRI BHATKAL RAMARAO PRAKASH (SUPRA) SHALL SQUARELY TO THE FACTS OF THE PRESENT CASE. 5. THE LD D.R, ON THE CONTRARY, SUPPORTED THE ORDER PASSED BY LD CIT(A). WE HAVE NOTICED THAT THE ENTIRE CONSIDERAT ION TOWARDS PURCHASE OF NEW RESIDENTIAL HOUSE HAS FLOWN FROM THE BANK ACCOU NT OF THE ASSESSEE. THE HONBLE KARNATAKA HIGH COURT HAS HELD IN THE CA SE OF MRS. JENNIFER BHIDE THAT THE DEDUCTION U/S 54 OF THE ACT SHOULD N OT BE DENIED MERELY BECAUSE THE NAME OF ASSESSEES HUSBAND IS MENTIONED IN THE PURCHASE DOCUMENT, WHEN THE ENTIRE PURCHASE CONSIDERATION HA S FLOWN FROM THE ASSESSEE. ACCORDINGLY, FOLLOWING THE DECISION REND ERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF MRS. JENNIFER B HIDE (SUPRA) AND THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN THE C ASE OF SHRI BHATKAL RAMARAO PRAKASH (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED TO FULL DEDUCTION U/S 54 OF THE ACT. ACCORDINGLY, WE SET A SIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW DEDUCTION U/S 54 OF THE ACT AS CLAIMED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MAY, 2020. SD/- SD/- ( N V VASUDEVAN ) ( B R BASKARAN ) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 8 TH MAY, 2020. / DESAI S MURTHY / ITA NO.2493/BANG/2019 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.